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In the first half of the year, the Italian manufacturing industry performed strongly, with substantial growth in almost all markets, with the food and pharmaceutical industries contributing to a pick-up in export growth. The latest data show that Italian exports in the first six months reached 306 billion euros, an increase of 56 billion euros over the same period last year. The analysis said that Italian exports will continue to recover in the second half of the year, but the rise in energy and raw material prices will be the biggest obstacle.

Recently, Italian manufacturing exports have been largely affected by rising prices for raw materials, energy and components. According to the Italian National Statistical Office, manufacturing costs in June increased by nearly 24%, while sales fell by 2.1%. The effect of inflation is obvious. In the increasingly extensive international competition, Italian-related companies have to increase their price lists in trade negotiations.

But on the whole, Italy's export performance in the first half of the year is still outstanding. In the first six months of this year, Italian exports reached 306 billion euros, an increase of 56 billion euros compared to the same period in 2021. If the data of the past 12 months is used as a reference, reaching the threshold of 600 billion euros in 2022 is not an "impossible task".

From an industry perspective, the vast majority of industries have performed positively recently, and the only one that is under threat is the automotive industry, which only increased by 3.3%.

Geographically, non-EU and European markets grew more synchronously, with exports to the two main markets, France and Germany, both rising by more than 15%. In fact, signs of stabilization came from the German auto market, which recorded a third consecutive monthly increase in production in July. Production in the first seven months of the year was close to 2 million. This also had some positive effects on components made in Italy, with exports of metals, rubber, plastics and electronics to Germany rising by double digits in June.

In addition, the strength of the U.S. dollar has provided Italian companies with ample leeway in pricing their exports, with U.S. imports of Made in Italy increasing by 31 percent. This means an additional 7.2 billion euros in revenue, the largest increase among all Italian exporters, followed by Germany and France.

Russia bore the brunt of the few countries whose exports were shrinking, stabilizing within a reasonable range after collapsing in March and April, holding the decline at 17.6% throughout the first half of the year. In absolute terms, compared with the figures for the same period in 2021, a decrease of 636 million euros is far lower than the preliminary estimates after the introduction of various sanctions programs after the Russian-Ukrainian conflict.

In addition, exporting to China has also become a major "lack" in the recovery of Italian manufacturing. Due to the repeated outbreak of COVID-19 in China, Sino-Italian foreign trade continued to be affected. It only recovered in June (exports to China increased by 9%), and the overall data in the first half of the year showed negative growth (exports to China decreased by 2%). However, in view of the continuous exchanges and cooperation between China and Italy in various fields, the decline is still controllable, and it is expected to continue to rebound in the second half of the year.

The aspect that has plagued Italy for several months has come from imports, which have surged largely because of widespread inflation in manufacturing, but above all soaring energy prices. Data shows that energy prices have doubled in the past year. In June alone, imports of natural gas and crude oil contributed 15.7% to the trend increase in Italian imports. As a result, the energy deficit has widened further, with a deficit of more than 48 billion euros in the first six months of the year. Overall, in the first half of the year, Italy's total imports rose by 44.2%, more than double its exports, breaking the trade balance. This is Italy's seventh consecutive month of "deficit", a net change from a surplus of nearly 29 billion euros between January and June 2021.